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Comparative Output and Labour Productivity in Manufacturing for China, Japan, Korea and the United States in Circa 1935 by a Production PPP Approach

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  • Fukao, Kyoji
  • Wu, Harry X.
  • Yuan, Tangjun

Abstract

Following the standard methodology for measuring industry-of-origin or productionside PPPs, this study compares the unit values of manufacturing products in China, Japan, Korea and the US to calculate unit value ratios (UVRs) and hence estimates PPPs for individual manufacturing industries using the US as the base country in circa 1935. Based on the products that could be matched between these countries, the estimated manufacturing production PPPs for China, Japan and Korea are only from half to two thirds of the prevailing market exchange rates, suggesting much lower cost of production in manufacturing in these countries than in the US. The estimated PPPs are used to calculate industry-level output and labour productivity in China, Japan and Korea relative to those of the US in circa 1935. The results show that the size of factory manufacturing in Japan was 12 percent of the US level whereas in China it was only one percent and even lower in Korea. In terms of comparative labour productivity, measured as PPP$ per hour worked with the US as the reference, Japanese and Korean manufacturing was 24 and 23 percent of the US level, whereas Chinese manufacturing was only 7 percent of the US level.

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File URL: http://hermes-ir.lib.hit-u.ac.jp/rs/bitstream/10086/17342/1/WP2008-26a.pdf
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Bibliographic Info

Paper provided by Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University in its series CEI Working Paper Series with number 2008-26.

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Length: 51 p.
Date of creation: Mar 2009
Date of revision:
Handle: RePEc:hit:hitcei:2008-26

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Keywords: Production (industry-of-origin) purchasing power parity (PPP); unit value ratio; comparative output and labour productivity; comparative advantage; economic development;

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  1. Summers, Robert & Heston, Alan, 1991. "The Penn World Table (Mark 5): An Expanded Set of International Comparisons, 1950-1988," The Quarterly Journal of Economics, MIT Press, vol. 106(2), pages 327-68, May.
  2. Fremdling, Rainer & De Jong, Herman & Timmer, Marcel P., 2007. "British and German Manufacturing Productivity Compared: A New Benchmark for 1935/36 Based on Double Deflated Value Added," The Journal of Economic History, Cambridge University Press, vol. 67(02), pages 350-378, June.
  3. Wu, Harry X., 2001. "China's comparative labour productivity performance in manufacturing, 1952-1997: Catching up or falling behind?," China Economic Review, Elsevier, vol. 12(2-3), pages 162-189.
  4. Kyoji Fukao & Debin Ma & Tangjun Yuan, 2006. "Real GDP in Pre-War East Asia: A 1934-36 Benchmark Purchasing Power Parity Comparison with the U.S," Hi-Stat Discussion Paper Series d05-132, Institute of Economic Research, Hitotsubashi University.
  5. Szirmai, Adam & Ruoen, Ren, 2000. "Comparative performance in Chinese manufacturing, 1980-1992," China Economic Review, Elsevier, vol. 11(1), pages 16-53.
  6. Maddison, Angus, 1983. "A Comparison of Levels of GDP Per Capita in Developed and Developing Countries, 1700–1980," The Journal of Economic History, Cambridge University Press, vol. 43(01), pages 27-41, March.
  7. Kyoji Fukao & Osamu Saito, 2006. "Japan's alternating phases of growth and outlook for the future," Hi-Stat Discussion Paper Series d06-196, Institute of Economic Research, Hitotsubashi University.
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